Lenders to beleaguered Electrosteel Steels have urged the National Company Law Tribunal (NCLT) to admit insolvency proceedings against the West Bengal-headquartered company.
Electrosteel Steels, which owes more than Rs 10,200 crore to an SBI led consortium of lenders, is among the 12 cases identified by the Reserve Bank of India’s (RBI) advisory panel for insolvency proceedings under the Insolvency and Bankruptcy Code (IBC).
“An order is awaited in the next one or two days after the tribunal studies the application,” a person aware of the development told ET.
A top executive of Electrosteel confirmed an application was filed by the lenders at the Kolkata bench of the NCLT. “There was a hearing at NCLT and an appeal was made on behalf of the lenders. We did not oppose the application,” the executive said. If the tribunal admits the lenders’ application, it will be a shot in the arm for the RBI-directed insolvency proceedings.
In Essar Steel’s case, the company had approached the Gujarat High Court against the RBI suggestion on bankruptcy proceedings against it. Last Friday, the court objected to the RBI, saying the NCLT will accord priority to bankruptcy proceedings it has recommended against Essar Steel Ltd and 11 other loan defaulters and adjourned the matter until Wednesday (July 12).
Earlier, Electrosteel was accepted in the corporate debt restructuring (CDR) cell for a recast of debt of over Rs 6,100 crore in December 2013.
Electrosteel Steels had informed the stock exchanges in December 2015 that lenders had decided to convert part of its debt worth over Rs 2,500 crore into equity. Subsequently, the lenders had invited bids from prospective buyers to offload their 51% stake in Electrosteel Steels. Lenders had shortlisted Tata Steel and London-based financial investor First International Group Plc.